Henri Nestle founded Nestle in 1866 in Switzerland. It set up its first production plant in India in 1961 in Moga, Punjab. Today it is the world's largest diversified food company with operations in over 130 countries. In India, it has been operating since 1912 starting in Chennai and Kolkata. It uses a multi-layered distribution network in India including C&F agents, super stockists, distributors, wholesalers, and retailers to supply its products nationwide. Profit margins vary across the different levels in the network.

1. Ananya Sunayana
Gourav Shrivastava
Jasmine Kaur Narula
Gokulnath Subramanian
Tanwi Shrivastava

2. • Henri Nestle founded the company
1866 in Switzerland
• Setup their first production plant in
1961 India at Moga, Punjab
• Currently the world’s number one
1 diversified food company
• Years of business in India starting
100 from 1912 to Chennai and Kolkata

3. 1868
• Henri Nestle designed the logo based on
Nestle’s german meaning i.e: Little nest
1966
• Combined mark formed along with the
word “Nestle”. Design Simplified.
1988
• Fledglings reduced to 2 to reflect modern
family of 2 children and 1 mom.
1995
• New simplified logo which reiterates Nestle
is not purely a nutrition company.

4. What makes Nestlé the
world’s largest food
company
are the millions of
consumers across
the globe who
put their trust in its
products, bite after
bite, sip after
sip, day after day.

7. National Zonal Regional Area Territory
Zonal Sales
Manager
North Sales Pallet Salesmen
Administration
Zonal Sales Executive
Regional Sales
Manager
Manager
South Territory
Area Sales
Manager Incharges(SO)
Zonal Sales
National Sales
Manager
Manager
West
Distributor
Zonal Sales Salesmen
Manager
East
Zonal Sales
Manager
Central

9. • Work Environment
Distribution Salesmen(DS) are direct reportees to the
Cash Distributors(CDs). Most CDs listened to ASM/TI guidelines.
Very few CDs work along with the DS in the market. Targets are
dictated to DSs.
• Training and Motivation
Annual Training workshop for all Distributor and Pallet
Salesmen irrespective of their experience. Considered more as an
outing for the salesmen.
• Performance Incentives
Basic Pay as fixed by CD. Ranges between 3750 - 5500
Maximum Incentive for DS : 1200/month
Average Incentive for DS : 750/month
Based on turnover achievement. Controlled by CDs.

10. Manufacturing
7 Plants across India
Plant
Carrying and
Forwarding 1 C & F per state
Agent(C & F)
1 Distributor per city
Modern Cash
Super Stockist 1300 in 2010
Trade DC’s Distributor
1 Super stockist per city
Multiple Purchase points per
Re – Distributor Retailer Wholesaler region
1 Re-Distributor per region
Last level purchase
Retailer Wholesaler STING points(Mostly rural)
Supply happens in weekly beats

11. C & F Agent
1.5% 1.5% 1.5%
Super Stockist
2 – 2.8 % -NA- 2–3%
Distributor/
Stockist 5.8 % 6.5 % 4.8 – 5.2%
Re –
Distributor 3.8 % -NA- 4–5%
Wholesaler
1.5 – 2 % 2% 1–2%
Retailer
7–8% 8 – 10 % 5–7%

12. C&F Super Distributor Re – Wholesaler Retailer
Agent Stockist Distributor
Landing 33.60 34.08 34.08 34.70 36.05 36.77
Price
Selling 34.08 34.70 36.05 36.05 36.77 39 – 45
Price MRP 45

13. • Capital Investment
Varies from region to region. Working capital required:
C & F Agent -> 3 – 5 Crores
Super Stockist -> 60 - 80 lakhs
Distributor -> 25 – 30 lakhs
• Relevant Experience
Needs to have prior experience in FMCG Sector. Should
not deal in a competitor’s product line.
• Infrastructure
a) Godowns /Storage space as per territorial requirement
b) Delivery Vehicles/Refrigeration for chocolates
c) Salesmen/ Personnel

14. • Channel Conflict
When higher members in the channel sell their
products directly to the last levels, bypassing the
intermediates. Occurs mostly due to overproduction and
dumping of goods by the higher channel member.
• Undercutting by Wholesaler
When a Wholesaler undercuts his margin and
supplies to retailers thereby cutting off potential
customers for the distributor.
• Invasion of Territory
Certain ASMs and Super Stockists indulge in
invasion of neighbouring territories. They undercut their
margins and dump their goods there to increase sale. This
is mainly due to higher targets given.

15. • Lack of Transparency between partners
Stock on hand at different levels in the chain not
clear to members above them
• Display incentives do not reach till retailer leading to
poor display of new products

17. • C & F Agent
• M/s Logi Nish Logistics India Pvt Ltd, Chennai
• Super Stockist
• M/s Kokila Agencies, Vellore
• Distributor
• M/s Sri Shakthi Ganapathy Agencies, Arni
• Wholesaler
• M/s Kamal & Co, Vellore
• M/s Rajiv Stores, Chennai
• Retailers
• M/s KPK Super Market, Vellore
• M/s Harish Food Zone, Vellore

18. • Zonal Sales Manager
• Mr. M V Subramaniam , RSM Chennai(North TN)
• Area Sales Manager
• Mr. R Shanmughanathan , ASM Chennai – II
• http://www.slideshare.net/nikunj1986/distribution-network-of-nestle-
kit-kat ; [19 - 03 – 2012 21:30pm]
• Nestle India Website ; http://www.nestle.in/ ; [20 – 03 – 12 19:29pm]
• http://www.scribd.com/doc/24419732/Nestle-Ppt ; [20 - 03 – 12
17:15pm]
• The Journal of Business Perspective· Vol. 14· No.4· October-December
2010